Hungry for lots ready for new homes in Tavares, LGI Homes has signed a contract to buy all the lots in a turnkey subdivision off Merry Road and Old U.S. 441.
The Texas-based homebuilder, which has been selling homes at a rapid pace across the country with a unique sales technique, spent $1.105 million to immediately "take down" its first 38 lots in the Chelsea Oaks South subdivision, according to a deed filed Jan. 8 in Lake County. The seller was TRG CFG Project III LLC, an affiliate of The Resource Group based in Jacksonville.
It is not clear from records how many total lots are in the Chelsea Oaks subdivision, which is north of Old U.S. 441 and east of Merry Road.
Juan Cuarta, vice president of land acquisition for LGI in Florida, said the company needed new lots because its other Tavares subdivision, Groves of Baytree, has nearly sold out the 119 lots that it bought from a retiring developer.
"This project is a replacement project for us," said Cuarta. "We had 119 lots at Baytree and we really burned through them."
Cuarta said Tavares attracts first-time buyers who can't afford homes closer to Orlando. Baytree homes sell from the mid $100,000s to the low $200,000s.
"We consider Lake County a tertiary market to the Orlando MSA and we find that tertiary markets are ideal for entry-level or first-time home buyers," Cuarta said. "They can find good value in Lake County."
The Texas-based LGI has a unique marketing, sales and land purchase due diligence process.
The company markets its neighborhoods by sending out flyers to renters in the area, advertising that they can buy a home for less than they pay in rent.
It moves into areas where there are 50,000 renters within 25 miles and then sends out 7,000 flyers to renters.
"If we get 18 responses we have got a hot market for us," Cuarta said.
Communities are expected to sell at least six houses a month, but recently the company has been doing better than that, with 7.2 sales a month on average, he said
Tim Shea of The Resource Group said LGI came to it looking to buy the land.
"Typically what most of the larger builders want if they can get it is to buy finished lots in the right location, that is their preference," Shea said. "If they started today (developing raw land into lots) it might take them a year to get approvals," a process with a lot of uncertainty, he added.